Pakistani car buyers are facing a potential financial shock as the government’s proposed Budget 2025-26 introduces new taxes set to raise car prices across the board.
The Suzuki Alto, one of the country’s best-selling compact cars, is expected to become significantly more expensive due to a sharp hike in General Sales Tax (GST) and the imposition of a new “Green Levy.”
According to industry estimates, prices of Suzuki Alto variants may increase by PKR 170,000 to PKR 190,000. This increase follows the government’s plan to raise GST on vehicles with engine capacities up to 850cc from 12.5% to a flat 18%. The Alto, which falls within this category, will be one of the hardest hit.
In addition to the GST hike, a 1% Green Levy will apply to all internal combustion engine (ICE) vehicles up to 1300cc. While this levy may seem minor, it is calculated on the vehicle’s total price — including existing taxes — further amplifying the final cost for consumers.
Estimated New Suzuki Alto Prices (Post-Budget 2025-26):
Alto VXR Upgraded: From Rs 2,827,000 to Rs 2,994,861
Alto VXR AGS Upgraded: From Rs 2,989,000 to Rs 3,166,480
Alto VXL AGS Upgraded: From Rs 3,140,000 to Rs 3,326,446
The proposed Green Levy will also apply across the broader vehicle market:
Up to 1300cc (Local & Imported): 1%
1301cc–1800cc: 2%
Above 1800cc: 3%
Commercial Vehicles (All Types): 1%
The tax structure aims to penalize larger, more polluting vehicles while encouraging a shift toward electric and hybrid models.
In a separate eco-focused move, the government has also proposed a PKR 2.5 per liter carbon tax on petrol, diesel, and furnace oil. Revenue from this tax will support environmental initiatives and promote the transition to greener mobility solutions.
Conclusion:
Budget 2025-26 reflects a strategic pivot towards environmental sustainability, but it comes at a cost for consumers. With prices of economy cars like the Suzuki Alto rising sharply, market dynamics may shift in favor of fuel-efficient and electric vehicles, pushing buyers to reconsider their options in the evolving auto landscape.